It is a pleasure to follow the hon. Member for Bromley and Chislehurst (Sir Robert Neill). He always brings a wealth and breadth of knowledge to these debates and we thank him for that; it certainly adds to the focus and the direction in which we wish to go. I also give my sincere thanks to the hon. Member for Thirsk and Malton (Kevin Hollinrake) and the right hon. Member for Barking (Dame Margaret Hodge) for their contributions. They have been terribly helpful to the debate today and we thank them for that. Others have contributed as well, and they have all added their experience and knowledge to the debate.
The Government stated in July 2020 that economic crime represents
“a significant threat to the security and the prosperity of the UK … This has a significant impact on the UK’s economy, competitiveness, citizens and institutions”.
It is therefore imperative for our own economic progress that we have an efficient strategy and proper guidelines to enforce punishment for economic crime. All right hon. and hon. Members who have spoken have indicated the direction in which we want to go and what needs to be done.
I would like to start with some figures, to give a real insight into the depth of economic crime in the UK. A total of 14.5% of the UK’s annual £2 trillion GDP is taken in economic crime. That gives us an idea of the magnitude of the issue. Some £190 billion of our losses come from fraud and a further £100 billion from money laundering. London has been described as a laundromat for corrupt money, and in 2019 the Treasury found many failings in relation to legislative guidance on tackling economic crime. We must do more to ensure that the resources are there to tackle economic crime properly. They are clearly not up to scratch at the moment, hence the billions of pounds that have been lost to theft over the last period of time. I very much look forward to the contributions from the shadow Minister and, in particular, from the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), who will endeavour to answer our questions, as he always does.
In response to Russia’s invasion of Ukraine, the Government fast-tracked the Economic Crime (Transparency and Enforcement) Act 2022 to crack down on the elites and the dirty money in the UK. As a result of today’s debate, I hope that the Minister will give us an update on where we are, how the situation has improved and whether we can take any other steps here in the United Kingdom of Great Britain and Northern Ireland to do better. The Government must make tackling economic crime a much higher priority, especially as it is a threat to our national security. We had some discussions on that in the urgent question this morning, and we have had other discussions in this Chamber and in Westminster Hall on the same issue.
We have seen some of the most intensive sanctions in our history imposed on Russia to ensure that oligarchs and business owners cannot operate in an illicit manner outside their own borders. That is an important and welcome step, but given that economic crime accounts for some 40% of all crime in the UK, there is more regulatory action that we should take. We must have a strategy that encompasses all of the United Kingdom
of Great Britain and Northern Ireland. The hon. Member for Thirsk and Malton referred to the “Panorama” programme and to the dirty money that came from Estonia right across Europe and ended up in one of the banks in Northern Ireland. In my intervention I referred to regulation for domestic customers, which is clearly there. I understand the reason for that regulation and I am in no way saying that it should not be there, but I have to question just how this can happen. Is it down to the bank? It happened to be the bank that I am a member of—I know some of the regulations the bank enforces on its customers because I am one of them. I understand that, but when I hear about £200 million moving across, it concerns me.
Paramilitarism in Northern Ireland has been significant in money laundering and in the criminal activity that it is involved in, whether it be money lending, protection money, drugs or, in the case of the IRA along the border, fuel laundering. The Government have made significant attempts to address all those issues, but many of those paramilitary groups have bought properties and businesses across the whole of the United Kingdom. I would love to see more attention being focused, through the legislation, on those paramilitary groups, who are criminals living off the backs of the local communities that they say they protect. They do not protect them; they take advantage of them and brutalise them. As a Northern Ireland MP, I am keen to see how this legislation can squeeze the paramilitaries, on both sides of the community in Northern Ireland, who are taking advantage of good local people.
We also need to consider the impact of cryptocurrency. I am sure that there are many cryptocurrency experts in the House, but I am not one of them. I have little or no knowledge of cryptocurrency. I am old-fashioned in preferring to use cash if at all possible, although I now use cheques and credit cards following covid-19, but cryptocurrency is becoming a more popular mode of finance among younger generations.
Not a week goes by when I do not see a story in the local or national press warning about cryptocurrency. I am not sure whether those warnings are heeded or whether there is regulation to ensure people are not caught by its sting. The Minister will give us his valuable knowledge of cryptocurrency and what is being done to regulate it, to monitor those involved and to ensure that our constituents do not find themselves in bother. There must be proper regulation of crypto-assets, with intensive efforts to ensure that people are not misled by the thousands of online scams. It is all too easy to make an onscreen decision, but people need to be aware that the decision is made once the button is pressed.
Consumers lost £754 million to online scams in the first half of 2021. I have been contacted by numerous constituents who have been victims of scams, and I suspect that others in this House will also have constituents who have been victims. Unfortunately, probably not a week passes without someone in my constituency finding themselves the victim of a scam, whether it is successful or whether it is stopped in time. The police issue a statement in the local press back home every fortnight warning of the latest scam, whether it is people knocking on doors or online scams. People are fairly trusting, by and large. More often than not, the people who are
hacked or who find themselves the victim of online scams are of an elderly and vulnerable generation. A few months ago, an elderly gentleman in my constituency lost some £30,000 of his savings to a scam by being trusting. These things happen regularly, and the Police Service of Northern Ireland regularly advises people to be careful.
People should be careful with their information and when using online bank accounts. People are not aware of how much fraud there is in the UK. Our focus is often on large-scale dirty money and money laundering involving oligarchs—the hon. Member for Thirsk and Malton mentioned the “Panorama” programme—and we forget about normal consumers who have their money taken every day and every week. The House must do due diligence to ensure that people are aware of the scale of the problem.
I will now conclude and give the Front Benchers the time they deserve. I welcome the numerous actions that the Home Office, the Treasury and the Minister have taken to ensure more efficient regulation and checks against economic crime. However, we have seen substantial sums of money coming to the UK through fraud and money laundering, so severe action and regulation is needed. We must ensure that the Treasury allocates the correct sustainable funds and staff to enforce proper punishment against economic crime, which is ever-evolving and becoming increasingly advanced.
I call on the Minister and the Government to take this into consideration, as I know they will. I am sure the Minister will answer some of our concerns. As we look to future policies to tackle economic crime, I praise him and the Government for all their work thus far. We need to be smarter than those who try to outsmart us.